The industries that help the world transition to net-zero emissions could be worth $10.3 trillion to the global economy by 2050, said sustainable development consultancy Arup and Oxford Economics in a recent report.
From heat waves to floods, extreme weather events are not only costly, but increasingly cause disruptions around the world, prompting governments and industries to strive to reduce greenhouse gas emissions and mitigate climate change.
“As economists, we need to be honest about the fact that mitigating climate change will be costly,” Adrian Cooper, chief executive of Oxford Economics, said in a statement. “But the transition to a carbon-neutral global economy also offers compelling opportunities.”
New emerging markets 5% of GDP
The analysis showed that the emerging new markets for carbon-neutral goods and services that help reach the net zero target of the Paris Agreement would be worth $10.3 trillion, or about 5% of projected GDP by mid-century.
The report stated, “This includes the direct contribution to GDP of electric vehicle manufacturing, renewable energy generation, clean energy equipment manufacturing, renewable fuels, and green finance; In addition to the activity powered by global supply chains.
It also showed that, as industries shift to clean energy amid a global energy supply crisis, the resulting disruptions will create new competitive opportunities for companies that are able to quickly adapt to changing demands.
Arup and Oxford Economics found that a green transition would result in greater productivity gains from climate change mitigation compared to “a world in which climate change is left unchecked, or mishandled”.
damage to the gross domestic product
A scenario analysis by Oxford Economics indicated that failure to act could damage global GDP by about 5% by 2050, and in 2021, it said the cost of weather-related disruptions to economic activity had already reached $233 billion.
“This report shows that the green transition is not a burden on the global economy, but a major opportunity for greater and more inclusive prosperity,” said Price Richard, Global Strategic Skills Leader at Arup.